from Persistent to Consistent

STILL Trading like a bloody tourist

Yes, this post contains a certain amount of self recrimination, invective and is possibly a bit ‘ranty’… but you’ll be quite safe since it’s directed inwards at the bit of my brain that does actually know better.

Quite often in life there can be a wide gap between ‘knowing’ a thing and doing said thing.

Do you know how to eat right? Yes. Do you do it? Nope!

Yesterday evening and this afternoon contain lovely examples of what might be the retail traders greatest fault and his ultimate downfall. Enter the NEMESIS..!!!

Trying to pick the top/bottom of a move

Another way to think of this (and you’ve done it too so don’t laugh) is when you spend a DAY looking at a falling market trying to figure out when it’s going to STOP falling for you to go long. And it keeps falling, falling, falling till you can’t stand it any more. You finally get to the point where your brain is going ‘surely, surely it can’t fall any more’ and sure as eggs are eggs it consolidates a little before taking you right out.

There are only two things that saved me from a complete balls up on this trade…

From having been looking at this topic for a while I now have a pretty finely tuned sense of when I have made a stupid mistake.

So having realised I’ve made an error I know enough not to get out in a panic and can usually bail for evens or close to it…

Indeed I was lucky this time and got out for minus 1 point. As I was typing an email about this shoddy experience to a mate the price took out what would have been my stop. So a victory of sorts but that brings ‘looking for the silver lining’ to a whole new level…

So here’s possibly the most embarrassing chart on my blog to date.

I tried to go long at the top of the lowest range when the market’s been dropping like a brick all day long… Oh dear… I simply wasn’t patient enough and was trying to ‘forecast’ (using not much more than wishful thinking) the end of the down move.

The point is that I actually do really know better than this. If all you (and I) learn from this is to buy the bottom of a channel and sell at the top I’m sure we should all be able to do fairly well. My psychology killed me all day because ‘I thought I knew better’ rather than just looking clearly at what was right in front of my nose…

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8 thoughts on “STILL Trading like a bloody tourist”

The market will stay irrational as long as you can stay solvent and all that…
Never been a top / bottom picker (snigger childish joke) myself but I struggle with other facets of trading psychology. I am really taking profits too soon. I’m not ‘getting’ punished as I am profitable but this is causing me to trade far too much and probably doesn’t really hit home the problem is a real problem as I am getting away with it. I’ve put all sorts of stupid contingencies in place such as leaving my computer and just leaving stop and limits in place. This isn’t suitable as I need to lock in profit and get out before my default +1 is hit.

The question is, what are you going to do to make sure you don’t do that again, or at least decrease the probability of not doing it again?

You don’t need to worry about that, Google has a solution with the advert on your page.

Think that swings the debate about whether I pay wordpress to remove ads from the blog or not… can’t have Google (a.k.a. the all seeing eye) taking the piss out of me as well as you blokes.

As far as not doing it again, well I’m basically trying to come up with the minimum number of rules I need because from what I can see the challenge is to minimise losses above all since ‘predicting’ what will happen next doesn’t look feasible. So from this blog post the rule could be ‘don’t buy at the top of a trading range’ and especially in a falling market.

Planning to write a blog post about attributes (personal ones) being more important than setups but that’s still getting sorted out in the back of my mind at the moment. Will get myself onto the forum as ordered 😉

Nice Rob, i’ve been trying to pick the bottom mentally all day (surely it can’t go any lower….oh) but somehow managed to stay out. Probably the thought of having to justify the trade to the guys in the room after they called it short all day 😉

Thanks Phil, and yeah – frankly I’m kicking myself but feel it was worth it to drive the lesson home 😉 Given the context due to Greece, China not ‘co-operating’ by keeping their state sponsored growth rate record on high gear etc… Anyway, the point being thinking is fine but trying to convince myself (as I certainly did) that I could pick the bottom.. erm… well there’s an easier way to make money or not lose money 😀

Or you watch it go down all day thinking it should be going up. Then you say “sod it” and join in short. Just as it does start to go up, even if only far enough to take out your (probably too tight) stop!